Seven Decades of Farming Scenario – A Review & Way Forward

By BNV Parthasarathi

India is basically
an agricultural economy and its economic evolution was primarily driven by
agriculture. However, if one looks at the economic growth in India and compares
the same with pre- and post- Independence one will find certain interesting
observations.

One can find from
the above data that India’s economic evolution has progressed from agro based
economy to service sector propelled growth in terms of GDP whereas the majority
of the population still continues to be engaged in agro based activities. On a
detailed analysis one will also find that manual and traditional cultivation
methods have given way to mechanized farming and therefore the number of people
employed in agricultural and allied activities should have come down substantially
whereas the data proves it is not so. One can also observe that the quantum of
agricultural production has in fact increased to meet the needs of the
expanding population post-Independence though the percentage of share of
agriculture in GDP has declined. In
other words one can say that by and large the agricultural productivity has
increased post-Independence in India though there is still a long way to go as
per the global standards. Mechanisation, green revolution, white revolution,
blue revolution are some of the major factors that have contributed to the
increase in agricultural production and allied activities as well as the
agricultural productivity in India. As a consequence to the above, one must
conclude that the number of people deployed in agriculture and allied
activities must have come down whereas in reality it is not so. Economists call
this phenomenon as under employment and disguised unemployment.

Methods
of cultivation

Farmers have been
tempted to go for inorganic farming as it gives better scope for greater agricultural
production and productivity. Therefore, usage of chemicals and fertilizers has
been on the increase in line with the above thinking leading to unhealthy food
production. While the financial cost of organic food production may be
relatively high compared to the inorganic food, social cost-benefit analysis
indicates organic food production is highly beneficial compared to inorganic
food. Unfortunately due to various reasons, not many efforts are made in India
to encourage the farmers to go in for organic cultivation. India ranks 15 in
terms of World’s Organic Agricultural land (2013 data as per FIBL & IFOAM
Year book 2015). India’s total area under organic certification is 5.71 million
hectare (2015-16). Share of agricultural land in the total land in India
increased from 59.6% in 1965 to 60.4% in 2014. As per Agriculture Census
2010-11, small and marginal holdings of less than 2 hectare account for 85
percent of the total operational holdings and 44 percent of the total operated
area. This is one main reason for low level of agricultural productivity in
India. At present, some 11 percent
(1.5 billion ha) of the globe's land surface (13.4 billion ha) is used in crop
production (arable land and land under permanent crops). According to the World
Factbook of the CIA in 2014, India ranks second in terms of global agricultural
output ($.367 billion). Dairy, horticulture and inland fisheries are high value
segments and India has huge potential to expand in these sectors. India ranks
first in terms of milk production accounting for 18.5% of world milk production
(2014-15).

Cropping patterns
many times are not in line with the market demand and availability of the water
resources which in turn predominantly depends on the rainfall. Government
departments and agencies like – meteorology department, agricultural ministry, and
agricultural marketing federations do not function in collaboration and
coordination with each other thereby leading to avoidable wastages caused by
wrong cropping patterns.

Water
Resources

India has
unfortunately followed the practice of excessive focus on highly expensive mega
and large irrigation projects/ dams/ reservoirs rather than giving preference
to check dams, small canals and ponds in the villages which cost less but are
more effective in storage of rain water and improving the ground water levels.
Mega and large irrigation projects are mostly mired in controversies in terms
of cost escalation, environmental and other hazards leading to time and cost
overruns quite often. In spite of this experience the policy makers and
government agencies continue to spend more funds on mega and large irrigation projects.
These misplaced priorities have led to several fertile lands turning into
barren lands and deserts over a period of time as the villages have neglected
the conservation of rain waters through check dams, small canals and ponds in
their region hoping that the large irrigation projects will give them access to
water resources for cultivation. It is high time that Indian government
realizes this mistake and takes swift corrective measures to encourage the
villages to go in for check dams, small canals and ponds. Countries like Israel
have proved that shortage of water resources will not be a constraint for food
production if scientific measures like drip irrigation are followed. The recent
bilateral agreement between India and Israel recognizes this aspect and has included
the same as one of the priority areas under the bilateral agreement for sharing
of the Israel’s expertise in the areas of drip irrigation and sewage waste
management projects with India.

Poor
Infrastructure

Studies indicate
poor infrastructure like bad roads and shortage of godowns and cold storage centresis resulting in around 10 percent
additional transport and storage costs to the Indian farmers. Food loss in India
is estimated at ₹ 920 billion per annum (harvest and post harvest losses).
Globally the food loss is estimated at 24% during production, 24% during
handling and storage and 35% at consumption. Therefore, strengthening the rural
infrastructure can save the annual food loss of ₹ 220 billion in India. This is one of the major areas of grave
concern yet not much of concerted effort is made in this direction.

Indian farmers also
face the problem of exploitation by middlemen and do not get remunerative
prices for their crops/ produce. Absence of godowns and cold storage centres only compounds this problem further,
leading to distress sale of their agricultural produce by the farmers. Farmers
also do not get adequately compensated for the crop loss due to famine and
floods, though crop insurance is very much available. Many small and marginal
farmers are either unaware or not in a position to bear the premium cost of the
crop insurance which is a matter of concern. Only 20 percent of the farmers in
India are insured for crop losses. Expensive insurance premium and out of
market methods of computation of crop losses for insurance claims are a few of
the factors that deter many small and marginal farmers from taking the crop
insurance cover.

Finance

Banks in India
lend to agriculture sector at concessional interest rates and in turn get compensated
for interest subvention as well as refinance from NABARD which is the apex
refinancing and regulating institution for agricultural banking. Small and
marginal farmers have also been encouraged to form Self Help Groups (SHGs) to
avail rural finance at concessional interest rates. NGOs and Micro Finance
Institutions play an active role in rural lending by providing wide range of
services like crop insurance, life and health insurance, capacity development
and skill development apart from giving loans to the small and marginal
farmers. Micro finance has succeeded in providing credit to the small and
marginal farmers at lower interest rates than the money lenders in India though
it is still expensive compared to the bank lending to agriculture. Political
interference, multiple regulators are some of the major issues in micro finance
and it is hoped that the Indian Government will bring a legislation enabling the
RBI (Reserve Bank of India) as the sole regulating authority to stream line the
micro finance sector in India as the draft micro finance amendment bill is
ready and awaiting passage of the same in the Parliament. Micro finance has
largely succeeded in bringing change in the mind sets of the Indian farmers,
who have realised that financial discipline and prompt repayment of the loans
will entail them to greater credit to expand their incomes whereas populist
measures like loan waivers or subsidies will not sustain them in the long run.

Migration
to cities

Due to uncertainty
of returns and unremunerative efforts in agriculture, people are migrating from
the villages to urban localities in search of livelihood. This has only
resulted in overcrowding of the cities posing challenges to the sustainability
of the outdated and overburdened urban infrastructure. This migration of people
from villages to cities has also led to paucity of agricultural workers/ labourers during the crop season in the villages.

Concerted efforts
are not made to promote agro based industries barring a few like sugar, cotton
and food processing units in a few clusters across the country; and as a
consequence, the seasonal activity in agriculture is not effectively
supplemented by other sources of income to the farmers leaving them high and
dry to the vagaries of monsoons.

Indebtedness

Indebtedness of
the poor farmers in India is mainly due to crop failure, unremunerative prices
and exploitation by middlemen leading to helplessness and frustration forcing
certain sensitive farmers to take the extreme step of committing suicides.
Unaffordable healthcare for medical emergencies also creates a distress
situation to the rural poor. Though there are several government welfare
schemes meant to address the above issues; at the ground level, one finds that due
to implementation gaps, lack of effective coordination between various agencies
and absence of an integrated policy framework, these problems are not fully
resolved. Indian government has exempted the agricultural income from taxation
in order to encourage the people to go in for agricultural activities. However
this has not benefited the small and marginal farmers who suffer a lot since
they do not fall under the tax net whereas the rich agriculturalists and
landlords who get huge income from agriculture are fully exempted from paying
income tax!

Clarity
in policy measures not a charity

Indian farmer does
not want charity. He considers agriculture as not only a livelihood but a
passionate activity that he worships. He wants the necessary supporting
infrastructure and remunerative prices for his toiled work and crop insurance
at affordable premiums to have sustainable living. It is high time the Indian
policy makers understood the mindsets of the Indian farmers and took long term
policy measures with an integrated approach to address the above major issues
to promote sustainable agriculture.

1 comment
:

A high end view of facts which the author has collated it at one place. Unless transparency and accountability is mandated at all levels be it at policy levels, both at political and bureaucracy,at the market intermediaries, at financial institutions including regulatory authorities + farmer is giving the centre of focus, I am afraid, things will continue to remain in the downward spiral.

We are a country with lopsided priorities with the media giving more importance to business interests and ratings, the citizen is apathetic and forgets his misfortunes in the soap serials,cricket scores and the affairs the film stars be it of Bollywood or the regional centers, the investing community is more interested in catering to the global markets and with small sachets, we can milk and sweat the existing assets in the rural hinterland, and without an enlightened leadership, I am afraid we will not be able to leverage the natural resources we have in this country _ climatic, human to modernize the agricultural sector and position it to gain 10X increase in GDP.

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